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The beginnings of mathematical modelling of economic phenomena can be found in the very early stages of classical political economy development. English scholar William Petty (1623-1687) emphasised measurement of values and schematic modelling of relationships between them in his study of national economy. French economist Francois Quesnay (1694-1774) proposed a tabular representation of the national economy which is considered as the first macroeconomic model.

Leon Walras (1834-1910) used mathematical apparatus as absolutely essential part of his considerations about economic theory of marginal utility and by derivation of the general theory of economic equilibrium. His pupil Vilfredo Pareto (1848-1923) was a successor in his professorship at the University of Lausanne, whose name is today primarily associated with Pareto’s optimality.

The development of mathematics in economics continued to progress in many ways after the First World War. An important milestone in this development was the year 1931 when the Econometric Society was founded. After that the society began to periodically publish journal Econometrica. This journal started to shape the science of econometrics. The mathematical description and statistical verification of economic relations and the concept of introduction of mathematical methods to economics are considered as the main goals of econometrics.

In 1939, Leontief published his work The Structure of American Economy, which became the basis for structural analysis. In the same year, L.V. Kantorovich formulated the principles of linear programming. In 1944 J. von Neumann and O. Morgenstern published the book Theory of Games and Economic Behavior.

After World War II the development of linear programming is regarded to be the credit of G.B. Dantzig, the author of the simplex method. In the fifties, operations research, including mathematical programming, network analysis, queueing theory, inventory theory, simulation models, and game theory, has become an established discipline and in the sixties and seventies multi-criteria optimization has emerged.


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